To ask the Scottish Government what measures it is taking to support businesses to address reported declining retail sales. (S6O-03459)

Our retail strategy sets out how we will work with businesses and trade unions to deliver a strong and prosperous retail sector in line with the vision of the national strategy for economic transformation. The strategy sets out a clear vision for a retail sector in Scotland that is successful, resilient, sustainable and profitable. It seeks to build on retail’s strengths and maximise opportunities for the sector to fulfil its potential and contribute to our economic transformation.

The Scottish Retail Consortium said that retail across all sectors in Scotland has seen a drop in sales on a year-on-year basis since April. Food sales dropped by 3 per cent and non-food sales, excluding online sales, decreased by 4.9 per cent. Given that the Scottish National Party has refused to pass on business rates relief, what specific support can the Minister and the Scottish Government give to our local retailers?

On the specific point about non-domestic rates, I first highlight the considerable support that the Government provides through non-domestic rates relief, which is valued at some £685 million this year, from an estimated revenue of £3.1 billion. Specifically, a significant proportion of that goes towards the small business bonus scheme, which the member knows is a significantly generous scheme from which many retailers benefit.

More broadly, retail is not immune from the significant economic pressures that we have been facing, whether that is the broader cost of living crisis or the response to the significant inflation that we have seen. That is thankfully now reducing significantly, but it has led to significant rises in interest rates, which will have an effect in the form of depressing consumer spending.

However, we are committed to continuing to work constructively with the retail sector. Yes, we recognise that regulation and fiscal powers and taxation play an important part, but we must work more broadly to recognise consumers’ changing habits with regard to the channels that they use to access retail, and we should not look at retail and policy in isolation but see it in a holistic way that aligns with our broader aspirations around town centre and local living, for example.

I am very much looking forward to taking up my responsibilities around retail, and I pay tribute to my predecessor, Joe FitzPatrick, and the role that he undertook in taking forward the retail strategy. I am committed to working constructively with all members and the wider sector to ensure that we have a prosperous and flourishing retail sector in Scotland.

Does the Minister share my concern that the UK Government’s refusal to substantially raise the threshold at which businesses pay VAT is leading to ever greater numbers of small businesses being forced into VAT registration? Despite cumulative inflation of 32 per cent since 2017, the threshold of £85,000 was frozen for seven years until a paltry raise to £90,000 was carried out as part of this year’s UK budget. Of course, that has a very adverse impact on our businesses. Does he also agree that the suggestion by Labour Party advisers that the threshold should be lowered to £50,000 is not only damaging to business but downright irresponsible?

I call the Minister to answer on those matters for which he is responsible.

As is implicit in your much-valued advice, Deputy Presiding Officer, the UK Government retains the Majority of the tax policy levers to boost much-needed economic growth. I would insist that it ensures that the increase to the VAT registration threshold that was introduced in April this year needs to provide value for money and give businesses the long-term assurances and certainty that they need to support economic growth. Therefore, we will continue to call on the UK Government to provide businesses with the support that they need to protect jobs and the economy.

However, the better solution would be that powers over VAT and the broader fiscal levers, which are currently in the hands of the UK Government, be devolved to this Parliament so that we can more holistically and effectively put in place policy measures that will support our economy and our economic needs.

Thank you, Minister. That concludes portfolio questions on the wellbeing economy, net zero and energy. Before we move to questions on the next portfolio, there will be a brief pause to allow those on the front benches to change positions.